port hedland port may expand with china's help

Port chiefs turn to China to play expansion role
3rd August 2009, 11:15 WST

The head of the Port Hedland Port Authority has suggested China could play a role in the future development of Australia’s biggest-tonnage port as he prepares to fly to the country later this month.

PHPA chief executive Andre Bush said Chinese interests “could well be participants” in the port’s growth plans, which include a 400-milliontonne-a-year outer harbour.

Mr Bush also revealed China Inc had already expressed an interest in the port’s expansion, but played down suggestions he would be canvassing financiers on this month’s trip.

“There have been a number of parties (to show an interest) because, obviously, (our plans for the outer harbour) have been out there for a while,” he told The West Australian.

“So parties have shown interest but that’s not the purpose (of the trip) at this stage. Opportunities might come up but that’s premature at this stage.

“China could well be participants in the future … it’s good to keep good relationships at all levels.”

Mr Bush and PHPA chairman Ian Williams will fly to China in the middle of the month for a week-long trip to visit four of the country’s biggest bulk commodity ports.

He said the trip was intended partly to consider establishing a sister-port relationship with a Chinese port, partly to consider other “opportunities” and partly to reciprocate, having hosted past Chinese delegations in WA.

“There’s an element of PR, an element of investigation and an element of reciprocation,” Mr Bush said.
“We’ll see what opportunities there may be for a sister-port relationship and opportunities for our plans for the future harbour.

“It’s very much a preliminary visit.”
Speculation over the future of Port Hedland’s outer harbour has been growing since BHP Billiton and Rio Tinto unveiled their proposed Pilbara alliance in June.

The long-planned outer harbour is widely believed to be reliant on the support of BHP. However, some commentators have suggested that if its tie-up with Rio goes ahead, BHP may instead look to direct extra capacity through its rival’s ports — at Cape Lambert and Dampier — which would be cheaper than an expansion at Port Hedland.

Such a decision would be a major blow to the future of Port Hedland, where capacity at its inner harbour is already in short supply.

Mr Bush’s comments are the strongest indication so far that the PHPA may be actively considering alternative funding options to bankroll the expansion.

Chinese groups are already poised to play a substantial role in the development of the Oakajee port and rail development in the State’s Mid-West.

However, China Inc is believed to want to secure equity in the project, instead of simply supplying funding and providing materials, and it remains unclear whether China Inc would be prepared to settle for anything less at Port Hedland.

The PHPA trip comes as the authority continues to try to free up space at the already-congested port after confirmation Gina Rinehart’s Hancock Prospecting was pushing to have its 30 million tonne a year capacity increased at the port’s South-West Creek development. The PHPA has been looking at ways to accommodate the request, which could include an additional berth.

Mr Bush said the discussions were continuing but they were “moving in the right direction”.

“It’s still a work in progress but we are progressing,” he said.

Port Hedland is Australia’s biggesttonnage port and the world’s biggest bulk export port.